Snap IPO will make billions for founders and two big investors

Snapchat CEO Evan Spiegel stands to own about $3.7 billion in stock after the offering.

By

RolfeWinkler

Snap Inc.’s initial public offering promises to make a nice fortune for a number of Silicon Valley venture-capital firms, but especially two: Benchmark and Lightspeed Venture Partners.

They are the largest outside investors in Snap, which filed public IPO papers on Thursday. Benchmark holds 131.6 million shares and Lightspeed 86.6 million, which translated to $2.1 billion and $1.4 billion, respectively, at Snap’s year-end estimated fair value of $16.33 a share.

The value of those stakes is likely to change at the outset. At $16.33, Snap’s valuation is roughly $21 billion, but it could price shares in its IPO at a valuation of up to $25 billion. Once shares begin trading on the New York Stock Exchange, likely next month, the valuation could rise or fall before investors are able to sell much of their stakes.

The biggest winners when Snap goes public will be its two founders, who still run the company: Chief Executive Evan Spiegel and Chief Technology Officer Bobby Murphy. Their holdings would be worth about $3.7 billion each at $16.33 a share. And with the IPO Mr. Spiegel is set to get a nice bonus—a fresh slug of shares equal to 3% of the company’s outstanding stock, which could translate to an added $600 million or more depending on the price at which the company goes public.

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